IT Giants Invest Heavily In GenAI
Indian IT services companies are increasing their investments in Generative Artificial Intelligence (GenAI) as clients show a willingness to pay for early proof of concept (PoC) and collaborate closely with service providers to explore the potential of this technology.
Clients of IT firms are allocating 1-3% of their technology budgets as a one-time fund to experiment with GenAI, presenting a significant opportunity for IT service providers to tap into this resource. Some clients have already initiated paid PoC projects with providers, indicating a sense of urgency in adopting GenAI due to its perceived early impact.
While GenAI may not immediately contribute significantly to IT companies” revenue, it holds margin optimisation implications. As companies experiment and scale GenAI solutions for specific use cases, they will achieve economies of scale and leverage their global delivery models to increase margins. Additionally, IT providers are using GenAI internally to reduce development times for client projects, resulting in higher productivity and immediate cost savings.
A report titled “State of AI in India” by Deloitte reveals growing confidence in AI among businesses, including IT sectors, with plans for year-on-year increases in AI investments. IT companies are taking strategic actions to accelerate AI adoption and maximise its value, including developing clear AI visions, adopting effective AI strategies, managing change effectively, and democratising AI adoption.
Leading IT firms like Wipro and Cognizant have committed substantial investments in GenAI. Wipro, for instance, pledged $1 billion to advance its AI capabilities and launched the Wipro ai360 ecosystem. Cognizant announced a $1 billion investment in GenAI and is actively engaged in numerous AI projects.
Infosys has also embraced GenAI, with CEO Salil Parekh highlighting the company”s involvement in 80 GenAI projects, particularly focusing on large language models for software development, text, document, voice, and video.
Mid-sized IT companies are not lagging, with companies like Coforge launching the Quasar GenAI platform, pre-loaded with over 100 cognitive and generative use cases. LTIMindtree introduced Canvas.ai, an enterprise-ready GenAI platform to help clients kickstart and scale their generative AI capabilities.
However, some analysts caution that while GenAI is promising, it is still an emerging field, and its full implications are yet to be seen. The technology is in its early stages, and IT companies are exploring various use cases. It remains to be seen how GenAI will be fully harnessed to deliver substantial results in the future.
The Indian IT services companies are recognising the potential of GenAI and are making strategic investments to harness its capabilities, despite the technology”s nascent stage and uncertainties about its long-term impact.
